Numbers don't make sense, IMHO. Value has dropped $350-$400K and that is affecting their ability to build a Monster home? Even if the value didn't drop and stayed the same, not really sure how they were even planning on tearing down a home, getting permits, plans,etc.... And building this monster home to make a huge profit. If the drop in the market has stopped their ability to do something, then they were not very smart or prepared (had a strong cash reserve or access to money) in the first place. Most likely received dumb advice from someone or came up with the crazy idea themselves. The way it sounds they wanted to make a killing and if that was the plan, they would have had to spend hundreds of thousands of dollars (high hundreds to over a million) to get the job done.

Maybe they had the money or bank backing for a well laid out plan, buy for a mil {or so} build for 6 to 8, sell for 2.2 or so,, using the same numbers minus the 400 loss in value, profit disappears and, for now anyways they can't get more money for the sale of the build.. so, no deal

I am (was) in a high demand area and based on my observations in the last two months the market has died (in relative terms) - inventory is not moving or if, verrrrry slow.

My guess is that things will stabilize over the next couple of years. I don't know if the Chinese government clamping down on the 50k per year FX limit is a part of the cause, limiting the bribery money entering Canada?

MOI is still very low so prices can still keep going up. Will be interesting to see what happens when condo prices plateau. I suspect active listings will start to increase over the summer as mortgage originations plummet and market uncertainty creeps in.

Conversely, there are still many folks strongly bullish on the Toronto housing market on other forums I visit.

I am (was) in a high demand area and based on my observations in the last two months the market has died (in relative terms) - inventory is not moving or if, verrrrry slow.

My guess is that things will stabilize over the next couple of years. I don't know if the Chinese government clamping down on the 50k per year FX limit is a part of the cause, limiting the bribery money entering Canada?

Statistically from Canadian government released a couple months ago, ownership of real estates in Canada by foreigners are very small in percentage. If I remember them right, foreigners only own about 3% of real estates in the GTA and around 5% in Vancouver.

All of these real estate prices' craziness (up and down) are not from the foreigners. However, I solely believe that they are all from the Canadian speculators (some says investors) who are the main force of the real estate prices' up and down.

It's a normal psychology that the problems which we have had such as real estates' pricing problems in Canada are not caused by Canadian but from foreigners such as Chinese. It's more of the psychological thinking of most of human beings and not a fact. In other word, all of the problems which we have had are not caused by our own actions but other people actions.

My belief is that although they are a small percentage of the buyers, they were driving the prices up. If something is for sale and someone with the bribery money comes in and starts making high offers, others will have to jump in to compete and so forth. Also, it is too coincidental that ever since they slapped the foreign buyers' tax that the market cooled off?

Originally Posted by NiceToMeetYou

Statistically from Canadian government released a couple months ago, ownership of real estates in Canada by foreigners are very small in percentage. If I remember them right, foreigners only own about 3% of real estates in the GTA and around 5% in Vancouver.

All of these real estate prices' craziness (up and down) are not from the foreigners. However, I solely believe that they are all from the Canadian speculators (some says investors) who are the main force of the real estate prices' up and down.

It's a normal psychology that the problems which we have had such as real estates' pricing problems in Canada are not caused by Canadian but from foreigners such as Chinese. It's more of the psychological thinking of most of human beings and not a fact. In other word, all of the problems which we have had are not caused by our own actions but other people actions.

Foreign numbers are high, but there is an unprecedented number of local buyers investing/flipping etc multiple properties. Much much much more than foreign buyers. Foreign buyers are pretty much concentrated in certain areas. The vast majority of the GTA is being bought up through speculation of domestic buyers. My office pretty much has hundreds of locals that own multiple properties here in the GTA. One small office may account for over 2000 speculative buys. We're an investment office. There are hundreds of offices like ours in the GTA and there are hundreds of hard core real estate speculators that don't own any financial instruments; only real estate. By all means I agree with the influence of foreign buyers(also agree with the corporate purchases you describe) but its nowhere near the number of properties being bought up by locals.

Foreign numbers are high, but there is an unprecedented number of local buyers investing/flipping etc multiple properties. Much much much more than foreign buyers. Foreign buyers are pretty much concentrated in certain areas. The vast majority of the GTA is being bought up through speculation of domestic buyers. My office pretty much has hundreds of locals that own multiple properties here in the GTA. One small office may account for over 2000 speculative buys. We're an investment office. There are hundreds of offices like ours in the GTA and there are hundreds of hard core real estate speculators that don't own any financial instruments; only real estate. By all means I agree with the influence of foreign buyers(also agree with the corporate purchases you describe) but its nowhere near the number of properties being bought up by locals.

+1 and you nailed it.

I knew it that this is the main factor in driving real estate in Vancouver and GTA out of the normality. As I mentioned earlier, it's a common human psychology that the problems are not caused by our own actions BUT caused by others (foreign buyers in this case).

It will. Just be patient. Play the long game. Save your money. The opportunity will come, if you will be ready. Don't rush into this overpriced market.

Real estate markets in both Canada and USA have crashed in the past. The best strategy is to wait until they will crash again to scoop up good homes with perhaps half of the prices they are listing right now. So weather it will be 2, 3, 5 or 7 years from today, it is worth waiting. Basically, a typical 4-bedroom and 2.5 baths of a 2-story home is listing at around 1.2 millions right now. When the real estate market will crash, it will be most likely listing for about half of the current listing price or around 600k.

So it's best to wait until the market will crash. Meanwhile, you are enjoying your life by accumulating more cash / saving and pension money in your accounts and at the same time still have plenty of cash left in each months to spend on other things such as eating out in the restaurants, buying a new vehicle and etc.

If you want to jump into the "over-priced" real estate right now, you will end up with no or very little money left after paying the mortgage of "over-priced" home.

I don't think prices will ever be cut in half. That would mean a price reversion back to the mid to late 2000s.

The best method is to buy whenever you can afford to. If you can't afford, don't buy. If you're going to live in the place you buy, it doesn't matter whether prices go up or down over the next decade.

Never try to time the market for your primary residence. Life is too short... people that tried to time the market in 2008 hoping for a crash are now 10 years older and have watched their buying power erode. So a person waiting in 2008 who was 25 is now 35, and the person that was 35 is now middle aged and both are still twiddling their thumbs for a crash that has yet to materialize. Meanwhile the person that could afford to buy and did in 2008 has paid down close to half of their mortgage. If they did pre-payments they might even be mortgage-free.

I don't think prices will ever be cut in half. That would mean a price reversion back to the mid to late 2000s.

The best method is to buy whenever you can afford to. If you can't afford, don't buy. If you're going to live in the place you buy, it doesn't matter whether prices go up or down over the next decade.

I agree with this part.

Two points:

1) My first house....six months after I paid for it the value dropped 25%. That meant it was only worth the mortgage and I'd lost my down payment. Ten years later I got back half my down payment but still sold at a loss. The next house, after 18 years is worth 5 X what I paid. The patience paid off whereas if I walked from my first house who knows where I'd be.

2) Told a family member ten years ago that real estate was inflated and to keep renting. Thankfully they found a good deal and didn't listen to me (Lesson learned on my part).

Find a deal that works and stick with it. Real estate, markets....whatever.

Find a deal that works and stick with it. Real estate, markets....whatever.

Good advice. Buy something if its affordable. Not barely affordable, but affordable and comfortable. You can't always have everything you want. Live within your means.

As far as the sentiment and direction of the RE market?.....Rates are expected to rise another 1/4 point this month. We could see two more over the next year after that. Interest rates dropping over the last 40 years along with home prices increasing over the last 40 years is no surprise. There is a direct correlation between the two(and its inverse). If rates are going up?...............

And by the way, costs in every way are going up as well; not just rates. Toronto property tax bills have been rising with hydro rates and gas, and sewer/garbage.....all the costs are going up and wages for the most part have not kept up at all.

Maybe there is no crash, but I'd hate to have just bought multiple investment properties and hold on for the next 10 year only to find out that my properties are worth 10% less and have to pay for capital expenditures like furnaces, roofs, air, etc. Or better yet, I keep hearing about "one time" assessments in condos all over city and they always tend to be about $30 000. That's a surprise bill for $30 000 that nobody every plans for.

I am (was) in a high demand area and based on my observations in the last two months the market has died (in relative terms) - inventory is not moving or if, verrrrry slow.

My guess is that things will stabilize over the next couple of years. I don't know if the Chinese government clamping down on the 50k per year FX limit is a part of the cause, limiting the bribery money entering Canada?